It is quite clear that Kickstarts are pre orders, because the SEC would shut the whole thing down if it claimed to be an investment scheme.
Really, any Kickstart that isn't "we need $X to place a bulk order with our raw materials supplier" is at best wishful thinking, and more commonly an abuse of how Kickstarter presents itself. It should not be for paying speculative salaries to the campaigners (Hi, LightTable!).
I don't think that it is clear to many people what a Kickstarter is actually. It is neither and investment, nor a pre-order. I personally view it more as a gift, which perhaps has a reward at some point. The backer "rewards" are aptly named- they aren't items for purchase, but something you might receive if the project happens to be successful.
When I back Kickstarter projects, I personally have no expectation of getting anything. I just want to see something cool happen.
While perhaps off topic, this is pretty much the model we take with the Awesome Foundation. We give money to people with a cool idea, expect nothing in return, and simply hope that they do something great with it. We take no ownership, and if it fails then that's ok. It was up to our judgement if we wanted to back them or not, and if we failed in that judgement then thats our fault and just a lesson to learn from.
Whatever it is called, you should never gift, invest, etc more than you can afford to write off and lose.
I feel too, that's it's sort of a gift or a "vote" that this project/idea should happen.
It's very much an "if, if, then" proposition. If you donate X amount and if we're able to build Y, then you'll get Z.
I think the risk is entirely on the donors, but since it is crowdsourced and the large majority of donations are so small, it seems like a fair trade most of the time.
The big problem comes when you get people donating 1k, 5k, 10k, etc and not seeing any return. I think those are the times where funds are seen more as "investments."
Boarders, perhaps. I've found that turning it the other way works best - Get a boarding party of your own, because taking a ship intact yields way more scrap.
I think I rushed forward far too quickly and ended up in a universe where I was outclassed and then had a little oxygen related mishap and it all went downhill from there!
- 900K is not much of a budget for a game with this scope - it may be a stretch for the team to deliver this.
- Team has experience with RTS.
- The pay off in terms of what I get is great.
- There have been no ground breaking RTS for the last 10 years.
Ultimately what got me over the line was the reputation of the company and the team.
I am fully aware that there may be nothing to show for it... I am sponsoring an opportunity for something great to be produced. Something not that far from music or art in my opinion.
I would say that it's quite clear that Kickstart campaigns are not preorders (unless they blatantly claim to be). I don't know the details, but the JOBS Act in the USA supposedly made sure that crowdfunding is allowed. http://en.wikipedia.org/wiki/Jumpstart_Our_Business_Startups...
While the JOBS act made crowdfunding possible, it is still regulated by the SEC, and kickstarter is not a crowdfunding platform. Kickstarter cannot be a market for equity in companies.
I'm probably biased but I disagree. I initially funded The OpenPhoto Project on Kickstarter. There was a deliverable but it wasn't a physical good.
The deliverable was completed as promised and we continued to build additional features and services above and beyond what the Kickstarter campaign allowed us to do.
Sure. It's great when it works. The worry is what happens when a hard-working project is unable to deliver, or when a con artist takes the money and runs.
"The worry is what happens when a hard-working project is unable to deliver, or when a con artist takes the money and runs."
Do you worry about that?
You should not get out of your house then. Meteorites keep bombarding the earth(they are falling right now!!). A king cobra could scape the zoo and reproduce(they store sperm) in the woods, don't go there.
It is really difficult that someone could not deliver something. If so hardworking then something is better than nothing. A con artist is not going to give their face in a video for all Internet to know, a con artist have not a proven record.
People forget what the millions of people that could see something means.
>You should not get out of your house then. Meteorites keep bombarding the earth(they are falling right now!!). A king cobra could scape the zoo and reproduce(they store sperm) in the woods, don't go there.
Don't be a dick. Online fraud is a real risk, it happens to people every day. Most people know not to send money to some random stranger who emails you, only to buy from reputable sites, or at a minimum to make sure you can claim back your money from your credit card provider if you get scammed. Which scenario is kickstarter more like?
>It is really difficult that someone could not deliver something. If so hardworking then something is better than nothing.
It's pretty easy to fail to deliver, even if they've tried; there was a story here not so long ago about a kickstarter made an iphone case that turned out to block the signal.
>A con artist is not going to give their face in a video for all Internet to know
Why not? Plenty of 419 scammers do.
>a con artist have not a proven record
Nor do many legitimate kickstarters. It's not like ebay where they post the feedback score right at the top and anyone without a high rating is suspicious.
This may well be "true" in the legal/accounting sense, but just because it's not allowed to be "an investment scheme" that doesn't automatically make it a pre-order, nor does it stop me from giving people money for investment-like-purposes but calling it something different to avoid both SEC shutting it down, and at the same time with the understanding that I'll have none of the redress that an SEC sanctioned investment might give me.
Yeah, there's a no-zero chance that the Kickstarter money might get stuffed in someones pocket without even a token effort to achieve the stated goal. One could also argue there's a lot of subprime mortgage holders and CDO investors who are fundamentally no better off than if every Goldmann Sachs employee was currently living it up in Mexico on stolen, instead of just "irresponsibly but legally paperwork compliant" SEC-approved "investments"
No, we should. Complain loudly about "fradulent investment schemes".
But at the same time, wonder what the _next_ money-losing thing that anyone who thinks Kickstarter is an "investment scheme" is going to need government protection from.
Do people _really_ think Kickstarter projects are the sort of thing that requires government/SEC oversight?
Edit: In retrospect, looking through the replies in this thread, there clearly _are_ people who consider Kickstarter backing to be "investment". I'd love somebody of that opinion to explain why they think that, and whether it's a wording/terminology issue with how Kickstarter and/or projects describe what they're doing, or whether it's something fundamental in the Kickstarter and/or crowdfunding process.
Not at all: complain about it all you want, and make your decisions in accordance with your understanding of the relevant risks.
Just recognize that a certain level of risk - in the form of possible breaches of promises - is inherent in the nature of all of these things - traditional investment, pre-orders, and Kickstarter alike - and that there's no way to pre-empt that downside without eschewing the upside.
With a traditional pre-order I have a pretty strong guarantee from my credit card company. With a traditional investment I take on the risk in return for a chance of a big gain. As a client/customer Kickstarter seems to combine the disadvantages of both with the advantages of neither.
Really, any Kickstart that isn't "we need $X to place a bulk order with our raw materials supplier" is at best wishful thinking, and more commonly an abuse of how Kickstarter presents itself. It should not be for paying speculative salaries to the campaigners (Hi, LightTable!).